Allowed

M/S Sharada Hp Gas v. the State of Karnataka

Karnataka HC22 Jul 2024WP/2904/2022

Case brief

AI extract

What is this about?

Petitioner distributor challenged penalty demand for alleged LPG overcharging. Court quashed show cause notice and subsequent demand letter due to lack of basis, material evidence, and application of mind, allowing writ petition and directing fresh notice if evidence exists.

What did the court decide?

Show cause notice dated 05.01.2022 and impugned communication dated 25.01.2022 quashed; liberty to issue fresh notice if material evidence exists.

M/S Sharada Hp Gas Vs the State of Karnataka — Consumer Protection | Karnataka HC (2024)

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NC: 2024:KHC:29107 WP No. 2904 of 2022

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 22^ND DAY OF JULY, 2024

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BEFORE

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THE HON'BLE MR. JUSTICE K. V. ARAVIND

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WRIT PETITION No. 2904 OF 2022 (GM-RES)

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BETWEEN:

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M/S SHARADA HP GAS GRAMAEENA VITARAKARU, HP GAS DISTRIBUTORS, HAVING ITS OFFICE AT SANTHEKATTE HEBRIKOKKARNE ROAD, 34 KUDI VILLAGE, BRAHMAVARA TALUK, UDUPI DISTRICT 576234. REP. BY ITS PARTNERS, SMT. GEETHA @ VIJAYALAKSHMI, W/O SRI SARVOTHAM SHANBHAG AND SRI SARVOTHAM SHANBHAG, S/O H. ANANTHAYYA SHANBHAG.

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Digitally signed by VALLI MARIMUTHU Location: High Court of Karnataka

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(BY SRI RAJASHEKAR S., ADVOCATE)

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AND:

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…PETITIONER

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THE STATE OF KARNATAKA, DEPARTMENT OF FOOD, CIVIL, SUPPLIES AND CONSUMER AFFAIRS, ROOM No.19, VIKASA SOUDHA, DR. AMBEDKAR VEEDHI, BENGALURU 560001. REP. BY ITS PRL SECRETARY.

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M/S. HINDUSTAN PETROLIUM CORPORATION LTD., A COMPANY INCORPORATED UNDER THE INDIAN COMPANIES ACT,

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NC: 2024:KHC:29107 WP No. 2904 of 2022

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HAVING ITS REGISTERED OFFICE AT No.17, JAMSHEDJI TATA ROAD, MUMBAI 40020.

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REP. BY AUTHORISED SIGNATORY.

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THE DEPUTY GENERAL MANAGER, M/S. HINDUSTAN PETROLEUM CORPORATION LTD., LPG REGIONAL OFFICE, 2^ND FLOOR, DEO GRATIAS BUILDING, CHILIMBI-URVA STORES MANGALURU 575006.

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…RESPONDENTS

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(BY SRI S.H. RAGHAVENDRA, AGA FOR R1; SRI B.K. SRIDHAR, ADVOCATE FOR R2 & R3)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE PENAL ACTION ORDER DATED 25.01.2022 PASSED BY R-3 VIDE ANNEXURE-A.

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THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE K. V. ARAVIND

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ORAL ORDER

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(PER: HON'BLE MR. JUSTICE K. V. ARAVIND)

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The petitioner is a partnership firm. The petitioner has

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entered into a partnership agreement to supply HP Liquefied Petroleum Gas. The petitioner was appointed as HP Gas distributor for the Kokkarne area. It is stated that the

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NC: 2024:KHC:29107 WP No. 2904 of 2022

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petitioner is entitled to delivery charges beyond the distance/radius of territory/distribution area of the distributor's location. Clause 9(e) of the Liquefied Petroleum Gas (Regulation of Supply and Distribution) Order, 2000 [for short, 'Order 2000'] enables the State Government to fix additional charges for home delivery of LPG cylinders to the customers, considering geographical terrain and/or the distance in the area of distribution.

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Respondent No.3, on behalf of respondent No.2Corporation, issued a show cause notice inviting explanation as to levy of penalty of Rs.80,277.44/- for overcharging during every refill delivery. The petitioner filed a reply dated 17.01.2022 denying overcharging.

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Respondent No.3 under communication dated 25.01.2022 raised a demand of Rs.80,277.44 towards overcharging on refill delivery. The said demand is called into question.

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Learned counsel for the petitioner submits that the show cause notice dated 05.01.2022 is without any basis. There are no instances of overcharging for LPG refills are stated in the show cause notice. Due to miscommunication the complaint

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NC: 2024:KHC:29107 WP No. 2904 of 2022

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was raised on 05.01.2022 and the same was resolved on the same day. The show-cause notice after 20 days of the complaint being resolved is with an intention to humiliate and harass the petitioner. The proceedings were initiated due to personal vengeance in view of the earlier disputes before this Court. It is submitted that the show cause notice is without application of mind. There is no basis for quantifying the demand at Rs.80,277.44. The delivery charges are as fixed by the State Government in exercise of Clause 9 of Order 2000.

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Per contra, learned counsel for respondent Nos.2 and 3 submits that overcharging is not permitted. Violation of Order 2000 would invite penalty. The demand for penalty is strictly in accordance with Order 2000.

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Sri S H Raghavendra, learned Additional Government Advocate appears for respondent No.1.

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Heard learned counsel for the parties and perused the writ papers.

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Respondent No.3 has issued show the cause notice dated 05.01.2022 to the petitioner inviting an explanation as to

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5 - NC: 2024:KHC:29107 WP No. 2904 of 2022

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demand of Rs.80,277.44 towards overcharging of refill delivery. The show cause notice does not indicate instances of overcharging on refill delivery. Though the complaint raised by

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the customer is only for charging Rs.50/- on LPG refills, the basis to arrive at a demand of Rs.80,277.44 is not forthcoming from the show cause notice. The show cause notice is without any basis or logic.

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The petitioner filed reply on 17.01.2022. In the reply, it is clearly stated that the customer was convinced and the complaint was closed as satisfactory. The petitioner has specifically contended that delivery charges were charged in terms of Clause 9 of Order 2000.

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Respondent No.3 in the impugned communication dated 25.01.2022 at Annexure-A has demanded Rs.80,277.44 as penalty for overcharging on refill delivery. The said amount is claimed to be an excess amount collected from the customers. This Court, on perusal of the show cause notice dated 05.01.2022 and the demand letter dated 25.01.2022, is unable to find any logic or basis for arriving at the total amount of Rs.80,277.44.

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NC: 2024:KHC:29107 WP No. 2904 of 2022

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The show cause notice dated 05.01.2022 and the impugned communication dated 25.01.2022 are without any basis, without application of mind, not justifiable, and cannot be sustained.

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Accordingly, the following;

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i) Writ petition is allowed.

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ii) The show cause notice at Annexure-W dated 05.01.2022 is hereby quashed. Consequently, impugned communication dated 25.01.2022 at Annexure-A is also quashed.

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iii) Respondents are at liberty to issue fresh show cause notice in accordance with law if in possession of any material evidence regarding overcharging towards delivery of LPG cylinders.

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Sd/(K. V. ARAVIND) JUDGE

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List No.: 1 Sl No.: 31

M/S Sharada Hp Gas v. the State of Karnataka

Case brief

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M/S Sharada Hp Gas v. the State of Karnataka

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